Insightful article by Eva Dou, for the WSJ, titled Rivals Try to Reinvent Xiaomi Business Model. I think the use of the word “reinvent” is almost meant to be ironic; you won’t find any hint of reinvention from the executives that Dou interviewed. Some nuggets:
In a hint of how quickly Lenovo has worked to develop a Xiaomi rival, Mr. Chang said his team was still figuring out what the [Lenovo brand] name ZUK stands for.
One morning this summer, hundreds of young engineers at Wingtech in blue cubicles and humming research stations were busy designing and testing smartphones for clients. Large clients such as Xiaomi and Huawei were cloistered into private rooms, to avoid secrets leaking to rivals. But testing equipment was shared, cutting costs for all the brands.
After reading these passages, what do you think the odds are that any one company’s business model or product will be different than the others’? Low. One alternative path forward: caring about consumers and the technology it takes to build better product experiences. Don’t recall if the executives interviewed used any variation of either word? They didn’t. And that leads us to the prediction:
IHS iSuppli China Research head Kevin Wang said […] “A lot of these smartphone players are probably going to die.”
Basically, some Chinese OEMs hope imitation can lead to differentiation. It won’t.